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Lane County Circuit Court

Charity founder found guilty

Pete Seda is convicted of smuggling and tax offenses

By Karen McCowan

The Register-Guard

Appeared in print: Friday, Sept. 10, 2010, page A4

An Oregon federal jury convicted an Ashland Islamic charity leader Thursday of conspiring with a Saudi associate to smuggle $130,000 out of the United States with the intent of funneling it to Muslim fighters battling Russian troops in Chechnya.

The panel also convicted Pete Seda of filing a falsified tax return for his Al-Haramain USA charity to hide that offense. The jurors deliberated for 1½ days before delivering their 6 p.m. decision.

Seda’s face grew grim, but he otherwise was stoic as a court bailiff read the verdict. There was quiet weeping among more than a dozen of Seda’s family members and other supporters in the Eugene courtroom.

U.S. District Judge Michael Hogan set a Nov. 23 sentencing date for the Iranian born, 16-year U.S. citizen. But he ordered Seda taken into immediate custody after prosecutor Charles Gorder, Jr. argued that he might flee the country, as he did in 2003 after learning he was under investigation.

Defense attorney Steve Wax had urged that Seda remain out on bail, noting that his client had voluntarily returned face his charges in 2007.

Seda was indicted in February 2005, along with co-founder Soliman Al-Buthe and Al-Haramain USA. Al-Buthe lives in Saudi Arabia, which has no extradition agreement with the United States.

Though the charity was branded a global terror organization by U.S. officials, charges against it were dismissed when it became defunct after Seda’s 2003 departure. Other former U.S. associates of the group are suing the government for wiretapping their phone conversations without a warrant. A federal appeals judge ruled this spring that those wiretaps broke the law.

“Money is the lifeblood of terrorism in these shady, violent, religious extremist groups,” he said. “If we can stop the flow of money, we can significantly reduce the threat here at home and abroad.”

He said the jury found that Seda lied to U.S. customs and IRS officials to duck reporting requirements “vital to our effort to make sure that money does not land in the hands of terrorists or other violent extremists.”

Assistant U.S. Attorney Chris Cardani, who prosecuted the case with Gorder, said the verdict showed that the U.S. criminal justice system, with its public courtrooms and lay jurors, “can handle terrorism cases.” Some advocates of closed-door tribunals for such cases have argued otherwise.

“Although there were no terrorism charges in this case, this was a case of terrorism financing,” he said.

In his closing argument Wednesday, Cardani had repeatedly underscored the latter point by holding up a handful of travelers’ checks, telling jurors: “This is how wars are fought” by Islamist fighters, not funded by a government like other soldiers.

According to evidence in the seven-day trial, Seda and Al-Buthe converted a $130,000 Al-Haramain donation into $1,000 travelers checks, which Al-Buthe carried out of the country in 2000 without declaring the cash to U.S. customs officials.

Wax called the Thursday verdict “a devastating blow to Mr. Seda and his family.”

“We do not believe it represents the truth of the charges or of his life,” said the federal public defender, who helped free a Muslim Portland lawyer falsely branded a terror suspect in the 2004 Madrid train bombings. That lawyer, Brandon Mayfield, received an apology and a $2 million settlement from the U.S. government. He was among Seda’s supporters at the Eugene courthouse on Thursday.

Wax pledged to appeal Seda’s case “to the highest court in the land, if need be.”

Seda’s defense team portrayed the longtime Ashland resident and arborist as a victim of scapegoating and guilt by association. They said the charity’s Medford accountant made the tax return errors but lied and blamed Seda when federal investigators began probing the charity after the Sept. 11, 2001, terrorist attacks. They said Seda was lumped in with violent, Islamic extremists but was a moderate Muslim known for promoting tolerance and peace.

Holton said Thursday’s verdict showed that there was another side to Seda.

“The mask is off,” he said, pointing to trial evidence that the charity mailed Muslim U.S. prison inmates a version of the Quran containing an appendix urging violence against other faiths.

“The defendant was sending out very dangerous rhetoric to people like prisoners,” he said.

In an interview after the verdict, Cardani called Islam “a religion of peace to most of its followers in the world.”

“But like all religions, it has its fringe elements,” he said. “What this verdict shows is that Pete Seda associated himself with those extreme fringe elements and sought to launder money through a so-called charity to arm Mujahadeen fighters in various wars.”

Holton called the U.S. Department of Justice “uniquely well-positioned to attack the financial lifeblood of terror because we’re able to go after bank records and hold people accountable for financial crimes like this.”

Since the Sept. 11, 2001, attacks, he said, “the DOJ has incarcerated over 400 people from cases arising out of terrorism cases. Some have come on to become cooperating witnesses — yet another important tool in stopping other plots.”